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RealEstateAnswer, Lawyer
Category: Real Estate Law
Satisfied Customers: 27296
Experience:  10+ years in handling Leases, Landlord-Tenant, Foreclosures,Mortgages, and Eviction cases
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I live in North Carolina. I have a loan on my house. I can

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I live in North Carolina. I have a loan on my house. I can no longer afford it. If I give the house to the bank will I have to pay a deficiency if the house sells for less than I owe on it.
Hi! I will be the professional that will be helping you today. I look forward to providing you with information to help solve your problem.

Good afternoon. I certainly understand the situation and your concern. What you are asking about is called and referred to as a deed in lieu of foreclosure. This is an option for a homeowner who can no longer afford the home and would like to avoid the foreclosure process. Essentially, the lender agrees to take the home and in most cases, will agree to waive any deficiency or balance owed, if the home is worth less then what is owed on the note. However, this is something which needs to be worked out and negotiated, as it is not automatic. Typically, the lender will want to make sure there are no liens on the property and that the taxes are paid, along with any association fees if they exist. In addition, you if you have been trying to sell the home for two years, you can see if the lender will agree to a short sale and accept less then what is owed, in satisfaction of the debt. In both cases, you would need to speak with someone in their loss mitigation department, to explore those options, along with the possibility of a loan modification ,if you wanted to try and keep the home but lower the payments.

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Customer: replied 3 years ago.

If they won't accept the deed in lieu and they foreclose can they sue me for any deficiency. I was told that they could not in NC.

Yes, they could, in certain situations. Here is a link that describes those and the conditions which would need to be met, for this to happen. Often times, they lender will only proceed if they think they can actually recovery. It takes time, effort and cost money to go after a defendant and if they will never recover, there is no point of going after them, since they already have the home back.
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